Reliance Industries to invest $27bn in next 4 years
March 14, 2013, 11:22 am

Indian petrochemical giant Reliance Industries (RIL) plans to invest about $27 billion in the next four years across its core oil and gas, petrochemical businesses and also new ventures like telecom.

According to a Deutsche Bank AG report issued after its analysts met one of the company’s two joint chief financial officers (CFOs), “RIL is at the cusp of its next capex cycle as it invests $27 billion over 2013-14 to 2016-17 fiscal.”

About 85 per cent of the capex will be in its core business, the report said.

Reliance’s KG-D6 block is India’s biggest natural gas field.

RIL will spend $11 billion in oil and gas exploration including a US shale gas venture and $4 billion in refining business.

Another $8 billion is planned in petrochemical projects while $3 billion would go into its yet to be launched telecom venture.

The remaining $1 billion would go into retail business, said the report.

Mukesh Ambani, RIL chairman and managing director announced last year plans to invest massively across energy, retail and telecom businesses in the next five years to double operating profit.

With a net worth of $21.5 billion, Mukesh Ambani has retained his title as India’s richest person (Forbes Rich list 2013) for the sixth year in a row.

The company is currently awaiting necessary regulatory nods for putting to production newer and satellite gas fields.

RIL is investing $8 billion, the most since it completed a second oil refinery in 2008, in expansion of its petrochemical business to meet rising demand of plastics and polyester.

Also, it is setting up a $4 billion petroleum coke gasification project that will produce synthetic natural gas that will replace expensive LNG as fuel.

“After our detailed meeting with the Joint CFO of RIL, we came out more convinced on our bullish view on RIL,” the report said.

“Our positive view on RIL is premised on expectation of approval for gas price increase in FY14, approvals for KGD6 R-Series and NEC-25 development plans in FY14 improving visibility on monetisation of these discoveries, and start of a new capex cycle,” it said.

57 founding members, many of them prominent US allies, will sign into creation the China-led Asian Infrastructure Investment Bank on Monday, the first major global financial instrument independent from the Bretton Woods system.

Representatives of the countries will meet in Beijing on Monday to sign an agreement of the bank, the Chinese Foreign Ministry said on Thursday. All the five BRICS countries are also joining the new infrastructure investment bank.

The agreement on the $100 billion AIIB will then have to be ratified by the parliaments of the founding members, Chinese Foreign Ministry spokesman Lu Kang said at a daily press briefing in Beijing.

The AIIB is also the first major multilateral development bank in a generation that provides an avenue for China to strengthen its presence in the world’s fastest-growing region.